Intelligent Tech Channels Issue 54 - Page 24


Part of the Lynchpin Media team , Manda Banda has more than 20 years of experience working for channel publications . He shares the knowledge he has learnt during that time in this monthly column for Intelligent Tech Channels .

Why market development funds matter to reseller partners

Manda Banda , Managing Editor , Intelligent Tech Channels
Manda Banda is also Lynchpin Media ’ s Managing Editor of Intelligent CIO Middle East and Intelligent CIO Africa magazines .
As a resource that a vendor grants to its indirect sales channel partners to help the channel with sales and marketing programmes , market development funds ( MDF ) play an integral role to business development and sales . The fund may be monetary or knowledgebased and marketers within channel partner companies use MDF to support a range of initiatives . So why should channel partners look at MDF and why do these funds matter ?

Market development funds or MDF as they commonly known in the regional channel are used in indirect sales channels whereby funds are made available by vendors to help channel partners ( resellers , VARs , solution providers , systems integrators and distributors ) sell their products by contributing to marketing materials and other related activities .

MDF , like most good things , is subject to some level of abuse . Channel managers know they need to provide partners with some level of marketing assistance as partners have limited marketing resources . Of their available budget , partners allocate most to either hiring salespeople or engineers . Consequently , most channel partners have very little in the way of marketing expertise . The average channel partner across the Middle East and Africa too often typically views marketing as , at best , a sales support function .
No direct correlation
When marketing gets treated as little more than a sales adjunct , the more limited the return on those investments become . There might be some value to be gained from a sales event involving , for example , contracting a sports legend to appear at a customer event . But usually , there ’ s no direct correlation between those events and increased revenue for a vendor . End customers may view the channel partner that funded the event more warmly . But the odds are low they will sign a contract just because they got to shake hands with a sports personality .
Today , most sophisticated channel organisations are now looking to maximise investment in market development funds in a programmatic way that goes well beyond a one-time sales event . To push channel partners in that direction , savvy channel managers are more aggressively measuring the results of any given marketing effort a channel manager makes .
Channel managers are now making concrete recommendations relative to what
Channel managers are now making concrete recommendations relative to what types of marketing programmes they are willing to fund . types of marketing programmes they are willing to fund . These recommendations are based on data they can now collect concerning how useful different types of marketing initiatives are .
The challenge
The challenge channel managers face is in dynamically allocating limited marketing budgets across those activities . As marketing increasingly becomes a science ,
marketing professionals are being held accountable for the return on every penny spent . The wild spending days like at the peak of the IT channel business in the mid 1990s and 2000s in the regional channel are long over . Decisions on where to allocate marketing funds are being made in near real-time , based on data generated within marketing automation systems . As a logical extension of those systems , most vendors nowadays are working with strategic media
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